Paradise is not twice as nice
A banker wished to charter a yacht for a holiday. ITIC insured the broker acting for the charterer who provided details of a yacht MY PARADISE to them, which had been received from the yacht’s central agent. Unfortunately, the information provided by the broker to the charterer included pictures and details for a more expensive yacht called PARADISE. The central agent had provided the correct information to the charterer’s broker, but it was solely the charterer’s broker’s error to include the incorrect PARADISE information in the details to the charterer.
Based on the information the charterer entered into a charter agreement for the MY PARADISE – thinking they were getting the PARADISE. After the charter agreement was executed and US$ 455,000 was paid by the charterer, the broker provided them with a promotional video of the MY PARADISE. It was at this point the charterer realised there had been a mistake and demanded the contract be cancelled alleging it was legally invalid and the money paid should be returned. The charter agreement was cancelled and US$ 353,000 was returned but US$ 102,000 was kept by the owners of the MY PARADISE in accordance with the terms of the charter.
It was clear that the broker had made an error in sending the wrong details. This was a negligent misrepresentation which the charterer claimed induced them into transaction. Therefore, there was no defence and ITIC recommended the US$ 102,000 be settled in full.